October 9, 2009

FG backpedals on N37bn healthcare contract

…opts for out of court settlement

By Ise-Oluwa Ige

ABUJA—The Federal Government has backpedalled on its decision to revoke a N37billion healthcare contract awarded by the administration of President Olusegun Obasanjo for construction of comprehensive health centres in each of the 774 local councils in the country.

The revocation of the contract is already a subject of litigation before the Abuja Federal high court.

The government made the disclosure on the reversal of its decision yesterday at the Abuja Federal high court while applying for an out of court settlement in the case.

The Office of the Attorney-General of the Federation explained that its decision to explore an out of court settlement was neither because its decision was unconstitutional nor that it had a weak case.

It simply said the decision to reverse the revocation was in the interest of the masses of the entire country.

It said its problem with the contract was the mode of payment of the contractor which conflicted with the provision of section 162 of the 1999 constitution.

The government said the idea of building primary health care in each of the 774 local councils in the country was a beautiful one which would bring health care to the doorstep of the grassroots people.

It said it would want to go into a drawing board with the contractor which dragged it before the court to reach an agreement on how payment would be made instead of the old arrangement of deducting from the shares of the local council at source.

Nathan Nigeria Limited which won the contract and later dragged the Federal Government to court said it was not opposed to out of court settlement of the matter. The court has given both parties till October 22,  to report back on the terms of settlement.